Stocks mixed in early trading; China worries depress commodities, boost greenback

Canadian Press, The Canadian Press
0 Comments| April 15, 2014

TORONTO _ The Toronto stock market was higher Tuesday amid well-received earnings reports from the US.

The S&P/TSX composite index gained 47.96 points to 14,332.39, weighed down by mining stocks as a stronger U.S. currency helped depress commodity prices.

The Canadian dollar was down 0.35 of a cent to 90.95 cents US as the greenback found strength amid another round of worries about Chinese economic growth and a much better than expected read on March retail sales on Monday.

U.S. indexes were mixed with the Dow Jones industrials up 36.81 points to 16,210.05, the Nasdaq slipped 2.33 points to 4,020.36 and the S&P 500 index was ahead 5.49 points to 1,836.1.

Coca-Cola earnings beat expectations as the beverage giant said adjusted per-share earnings fell to 44 cents while net operating revenues fell to $10.58 billion. Analysts polled by FactSet had expected earnings of 44 cents on revenue of $10.55 billion and Coca-Cola shares rose three per cent.

Also, drug company Johnson&Johnson reported earnings per share of $1.54, seven cents better than analyst forecasts while revenue of $18.115 billion beat forecasts of $17.996 billion. It shares ran up 1.37 per cent.

Intel and Yahoo report earnings after the close.

Worries about China weighed as data showed a tightening of credit growth. Money supply growth climbed just 12.1 per cent year-over-year in March, the slowest pace in 17 years.

And that slowing in credit growth raised fresh worries about economic growth in the world's second-biggest economy. There are worries that gross domestic product growth may fall below seven per cent in the current year, a full 0.5 of a percentage point below the government's target for growth. Official growth figures for China will be released Wednesday.

The rising U.S. dollar helped depress commodity prices. A stronger greenback makes it more expensive for holders of other currencies to buy oil and metals which are dollar-denominated.

May crude on the New York Mercantile Exchange fell 27 cents to US$103.78 a barrel, but the energy sector was up 0.85 per cent.

Encana Corp. (TSX: T.ECA, Stock Forum) has filed a preliminary prospectus for spinning off a portion of its assets into a separate publicly traded business, to be called PrairieSky Royalty Ltd. The Calgary-based natural gas producer expects to own a majority interest in PrairieSky, but precise details of the stake weren't disclosed in the prospectus. Encana shares were 58 cents higher to $25.25 after earlier hitting a new 52-week high of $25.36

The TSX also found support from the tech, industrial and financial sectors.

The base metals sector was the major decliner, down 2.3 per cent while May copper fell six cents to US$2.99 a pound.

HudBay Minerals Inc. (TSX: T.HBMStock Forumhas moved to block a shareholder rights plan at Augusta Resource Corp. (TSX: T.AZC, Stock Forum) , which HudBay is trying to acquire in a hostile takeover bid. HudBay has asked the British Columbia Securities Commission to cease trade the shareholder rights plan before its takeover offer expires on May 5. It says Augusta has had more than 60 days since the offer was announced and has failed to produce an alternative. HudBay shares lost 17 cents to $8.75 while Augusta shares fell 12 cents to $3.25.

The gold sector declined two per cent while June bullion fell $29.80 to US$1,297.70 an ounce.


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